B.C.’s labour market capped off a strong year with a modest employment uptick and a further decline to an already rock-bottom unemployment rate.
Employment rose by 5,600 persons to 2.491 million, up 0.2% from November, following a 0.7% increase the previous month. The Vancouver census metropolitan area (CMA) accounted for the net gain, with a 1.1% increase. Service sectors were the key driver of employment growth, led by health care and social assistance; professional, scientific and technical services; and finance, insurance and real estate.
With a second straight gain, B.C. shook off the brief hiring lull – observed from July through October – to maintain the province’s country-leading jobs performance. While year-over-year employment growth at 3.4% was second only to Prince Edward Island, full-year average employment growth of 3.7% was tops in the country, led by a 3.9% gain in full-time jobs. B.C. added 87,300 jobs on top of 73,000 net annual jobs created in 2016.
Labour supply is constraining hiring growth, as demand for workers is outstripping availability despite elevated labour force participation and rising population. The provincial unemployment rate was at its lowest level since mid-2008 at 4.6%, with the Vancouver CMA at 3.9%. Year-over-year hourly wage growth rose a strong 4% in the latest quarter.
The economy will be hard pressed to meet the same level of job creation this year. While economic growth remains solid, a low unemployment rate, high labour force participation and improved job prospects among other provinces will remain constraints to labour force expansion. Expect employment growth of 2.5% in 2018 and an unemployment rate fluctuating near 5%.
Meanwhile, a surge in visitors from the U.S. had B.C.’s tourism sector flying high in October, solidifying a rebound in momentum following a softer trend from late 2016 through mid-2017. Total international tourist visits rose nearly 4% from September to 496,021 entries. U.S. visits jumped nearly 6%; overseas visits held steady after a strong prior-month gain.
A favourable exchange rate and higher travel demand from China and other emerging markets have been key drivers of rising inflows in recent years, while there is evidence that a more volatile political climate in the U.S. has shifted global tourism dollars to countries like Canada. U.S. tourist inflows are the highest since 2000, while overseas visits remain near record highs. The latter are up more than 30% since the turn of the millennium. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.